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United States Court of Appeals for the Third Circuit
September 14, 2009, Argued; December 22, 2009, Filed
Nos. 09-1391, 09-1432, 09-1608
[*608] SMITH, Circuit Judge.
This appeal asks us to determine whether Chapter 11 bankruptcy petitions filed by Santa Fe Minerals, Inc. and 15375 Memorial Corporation (together, the "Debtors") were filed in good faith. There [*609] is ample evidence to support the finding of the District Court that the Debtors' bankruptcy petitions served no valid bankruptcy purpose [**2] and were used primarily as a litigation tactic to protect the Debtors and their parent companies from liability in pending litigations. Thus, we will affirm the District Court's order dismissing the bankruptcy petitions for lack of good faith. 1
The Debtors raise two issues in this appeal. First, they argue that the District Court incorrectly exercised plenary review, instead of review for an abuse of discretion, of the good faith inquiry. Second, they argue that the District Court erred in concluding that they did not file their bankruptcy petitions in good faith. 2
The historical and narrative facts in this case are not disputed. The District Court, finding no clear error in the Bankruptcy Court's findings of fact, adopted those facts for the purposes of its decision, BEPCO, L.P. v. 15375 Mem'l Corp. (In re 15375 Mem'l Corp. III), 400 B.R. 420, 423 n.4 (D. Del. 2009), and we do so as well. These facts were ascertained during a three-day trial held by the Bankruptcy Court to decide several motions, including a motion by Bass Enterprises Production Co. ("BEPCO") to dismiss the Debtors' Chapter 11 petitions for lack of good faith. Santa Fe Minerals, Inc. v. BEPCO, L.P. (In re 15375 Mem'l Corp. I), 382 B.R. 652, 658 (Bankr. D. Del. 2008).
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589 F.3d 605 *; 2009 U.S. App. LEXIS 28193 **; Bankr. L. Rep. (CCH) P81,652; 40 ELR 20010; 52 Bankr. Ct. Dec. 146
In Re: 15375 Memorial Corporation, et al., Santa Fe Minerals, Inc. Debtors/Appellants in 09-1391, Cross-Appellees in 09-1432, Cross-Appellees in 09-1608 v. Bepco, L.P., f/k/a Bass Enterprises Production Company, Appellee in 09-1391, Intervenor/Cross-Appellee in 09-1432, Intervenor/Appellant in 09-1608, Global Santa Fe Corporation; Global Santa Fe Corporation Services, Inc.; Entities Holdings, Inc., Intervenors/Appellees in 09-1391, Intervenors/Appellants in 09-1432, Intervenors/Appellees in 09-1608
Subsequent History: Related proceeding at Bepco, L.P. v. Santa Fe Minerals, Inc., 2011 U.S. Dist. LEXIS 110113 (W.D. La., Apr. 25, 2011)
Prior History: [**1] On Appeal from the United States District Court for the District of Delaware. District Court Nos. 1-08-cv-00313, 1-08-cv-00314, 1-08-cv-00318, 1-08-cv-00319, 1-08-cv-00321; 1-08-cv-00322; 1-08-cv-00325; 1-08-cv-00326. District Judge: The Honorable Sue L. Robinson.
BEPCO, L.P. v. 15375 Mem'l Corp. (In re 15375 Mem'l Corp.), 400 B.R. 420, 2009 U.S. Dist. LEXIS 5717 (D. Del., 2009)
Entities, bankruptcy court, bankruptcy petition, good faith, insurance policy, dissolution, state court, automatic stay, alter ego, contamination, tactic, petitions, maximize, litigations, purported, insurers, notice, filing for bankruptcy, demand note, rights, filings, plenary review, liquidation, policies, single business enterprise, lack of good faith, fact finding, settlement, cooperate, benefits
Bankruptcy Law, Judicial Review, Standards of Review, Abuse of Discretion, Conversion & Dismissal, Lack of Good Faith, Civil Procedure, Appeals, De Novo Standard of Review, Questions of Fact & Law, Clear Error Review, Clearly Erroneous Review, General Overview, De Novo Review, Bankruptcy, Reorganizations, Liquidations, Commencement of Case, Voluntary Cases, Business & Corporate Law, Corporations, Dissolution & Receivership, Voluntary Dissolution